Innovation as engine for Vietnam’s new era: Minister Nguyen Manh Hung

Minister Nguyen Manh Hung first evaluates the breakthroughs that create a foundation to enhance the national economy’s competitiveness.

The most outstanding result of science, technology, and innovation in recent times lies not in isolated achievements, but in a shift in awareness, thinking, and methodology. They have laid the groundwork for a new development framework, where science, technology, innovation, and digital transformation are oriented towards output results, with socio-economic development efficiency as the central criterion. The entire chain of research-application-commercialization is now placed within the logic of solving development problems, rather than operating in fragments.

These substantial changes are most evident in three critical aspects.

1. First is a constructive institutional framework focused on removing bottlenecks so technology quickly enters production and life. In 2025 alone, the Ministry presided over the drafting of 10 laws and numerous decrees, demonstrating a fierce determination to "unlock" long-standing barriers to scientific and technological development.
2. Second, digital infrastructure and governance capacity have been visibly upgraded. Vietnam jumped 15 places in the 2024 UN E-Government Index to rank 71st globally. With internet speeds in the global top 15, smartphone usage exceeding 85 percent, and 5G covering over 91 percent of the population, the nation has shifted from simple "digitization" to effective "data-driven operation."
3. Third is the sharp rise in innovation capacity and the startup ecosystem. Vietnam’s Global Innovation Index ranking has reached 44th globally. The country is now recognized as one of nine middle-income economies achieving the fastest improvement over the past decade, significantly elevating its international competitive position and standing.

Over the past five years, substantial changes have transformed administration and production. The State’s service has evolved through digital transformation. Administrative procedures are now transparent, slashing paperwork and waiting times. By 2025, fully online dossiers have reached nearly 78 percent, marking a strong shift from physical queuing to the digital realm.

Simultaneously, enterprise capacity has deepened via automation and process innovation. Data exploitation helps businesses optimize operations, cut errors, and save energy. Finally, the digital space is now a vital living environment, providing citizens with fast, personalized services in education and healthcare.

Ultimately, citizens gain convenience, businesses gain productivity, and the State gains governance capacity. This remains the most substantial measure of science, technology, and modern innovation in daily life.

Minister Nguyen Manh Hung then focused on the most significant differences of Resolution 57. Previously, administrative micromanagement of inputs stifled creativity, forcing scientists to focus heavily on procedures rather than research. This resolution fundamentally resets priorities, shifting to output-based management and also accepting controlled risks and failure, a prerequisite for generating true innovation.

This shift is quantified by specific targets:

• The Total Factor Productivity must contribute over 55 percent to economic growth. This affirms a reliance on productivity and technology rather than merely expanding capital and labor.
• Vietnam aims to form at least five digital technology enterprises comparable to advanced nations to act as “locomotives” for the ecosystem and drive growth.
• Research value is now measured by marketability, targeting a commercial exploitation rate of 8-10 percent. The focus moves from "acceptance is the end" to practical application, ensuring “Make in Vietnam” products solve key national problems.
• The State will allocate at least 3 percent of the annual budget to science and technology. Crucially, mechanisms are shifting away from detailed control to lump-sum expenditures, granting ownership rights to research organizations, and ensuring researchers share benefits upon successful commercialization.
• A strong scientific foundation requires market nurturing. The Resolution targets R&D spending at 2 percent of GDP, with social funding comprising over 60 percent. Here, the State provides vital “seed capital.” However, when businesses invest, they demand tangible results.

This market pressure constitutes the most natural and effective monitoring mechanism to realize output-based management, ensuring that science serves development rather than existing merely on paper, effectively transforming research into real-world economic value.

In 2025, the Science and Technology Ministry presided over drafting, amending, and submitting to the National Assembly for approval 10 laws on science, technology, and innovation, considered a crucial step in removing institutional bottlenecks.

This legislative push establishes a new framework, featuring pioneering laws on AI and Digital Transformation. Crucially, it revolutionizes management thinking by finally acknowledging that innovation inherently involves risks and potential failures. New regulations ensure these risks are managed effectively rather than eliminated by rigid procedures.

Enterprises are now established as the ecosystem's center, participating from the start of the process with clearer rights to own and commercialize research, even when state-funded. When businesses hold genuine rights, they are emboldened to invest heavily in R&D. Furthermore, technical knots regarding transfer and IP valuation are untied, significantly shortening the path from laboratory to market, turning knowledge into tangible products.

Another vital breakthrough is the “sandbox” mechanism, creating a legal corridor for testing new technologies under controlled supervision. This allows startups to innovate legally before expanding. Finally, the strategy connects research directly to market needs through ordering mechanisms and public-private partnerships. When research addresses real-world problems with a clear “buyer,” application accelerates, and social resources are mobilized more effectively to drive sustainable economic value.

Over the past five years, Vietnam has significantly improved on the Global Innovation Index (GII). Beyond state budget sources, the Ministry has implemented a series of solutions to unclog capital flows from the private sector, venture capital funds, and international resources, thereby realizing the goal of transforming Vietnam to a dynamic startup hub of the region, as proposed at the ASEAN Digital Ministers’ Meeting.

Innovation becomes sustainable only when capital flows are unclogged. In this, the State’s pivotal role is to establish mechanisms and generate initial traction. It prioritizes perfecting the legal corridor so that private, venture, and international capital can flow into the creative startup ecosystem transparently and controllably. The Law on Science, Technology, and Innovation has created a basis for forming national and local venture capital funds using state budgets.

Vietnam views ecosystem connection as a decisive factor. The Ministry actively promotes cooperation with major startup hubs like Singapore, the Republic of Korea, and the US, while elevating Techfest to assure international investors that Vietnam is a serious market capable of absorbing capital.

Additionally, clearly identifying priority areas is the most effective way to lead capital. Vietnam has identified 11 strategic technology groups, including AI, semiconductors, and green technology. This focuses on national autonomy and long-term competitive advantages.

When the State sets clear strategic orientations, investors can visualize the roadmap, encouraging long-term commitments over short-term profits. To become a dynamic regional hub, Vietnam must compete through ecosystem quality, namely transparent institutions, market size, and connectivity, rather than short-term incentives. When these conditions converge, capital flows will find their way.

In order to realize the draft Document of the 14^th Congress, which emphasizes a new growth model, a double-digit growth target, and sustainable development requirements, science-technology and innovation must be put at the center of socio-economic growth, shifting from a specialized role to a consistent driving force of national development via practical solutions:

1. Institutional perfection: Institutions must pave the way for creativity, building legal frameworks for key sectors and implementing controlled testing mechanisms. Laws must adapt annually to the rapid pace of technology rather than waiting years for amendments.
2. Mastering strategic technologies: Vietnam must pursue self-reliance, prioritizing resources for semiconductors, AI, UAVs, advanced materials, and new energy, while gradually developing space and quantum industries. These are the new growth poles determining our future competitiveness.
3. Fundamentally reforming management models: The country must shift from “spending on research” to “purchasing results,” moving from input management to output investment, while using intellectual property as a development tool.
4. Developing modern digital infrastructure, focusing on shared data platforms, AI centers, and high-performance computing.
5. An innovation ecosystem based on talent: Without talent, there is no strong nation. There is a strong need for mechanisms to attract the best people, implementing a “three-house” (State – Institute – Enterprise) model where businesses are central and the State is constructive, while unclogging capital flows through public-private venture funds.